asset sizes over $1 billion, and 10 with assets under $1 billion. I did the same for banking. I utilize lists provided on the NCUA and FDIC websites. When selecting the 9 products to compare, I chose products that were offered at all intuitions I researched and had published rates. In the chart below, I bolded the better rate for the banking product that is being compared. What I found was that Credit Unions offered a better average rate than banks in 6 of the 11 products. With the average rate difference across all 11 products being 60 basis points. This would mean that on a 5 year, $20,000 loan, you would pay $346 more if your rate was 6.60%, compared to 6%, or about an extra $5.77 per month. The following graph shows that in 1995, there were 14 Wisconsin based banks with assets of over $1 billion. Those 14 banks had combined total assets of $36 billion. Today, there are 25 banks in Wisconsin with assets of over $1 billion, with combined total assets of $104 billion. This growth dwarfs that of banks with assets under $1 billion. In 1995, there were 425 such banks, with combined total assets of $48 billion. In 2023, there were just 136 banks, with total assets of $49 billion. So, while the remaining banks grew individually, the total sector has not grown, and most of the asset growth has been orientated towards large commercial banks. The chart below highlights the disparity of banking growth in Wisconsin.
Conclusion Our research has shown that the banking climate in Wisconsin has changed significantly over the past several decades. Banks have gotten larger and Credit Unions have grown robustly. But the most important question that we can ask is: Is the current banking climate fair, and does it allow for proper competition between all financial institutions. A fair and competitive banking climate will result in the best rates for consumers, the newest technology implemented, and the overall most enjoyable experience possible. Credit unions enjoy tax free status due to the perception that they can offer better rates and services to their customers. But my research has shown that this may not reflect reality. Credit Unions do not universally offer better rates for consumers and may not offer as many services and products as banks do. Additionally, the ever increasing market share controlled by credit unions, diminished the tax revenues the State of Wisconsin would have otherwise collected. Moving forward, I urge our state and federal representatives to review existing laws and regulations to ensure a fair and consumer-focused banking system. Unfair competition continues to threaten Wisconsin’s community banks, and it is essential to reassess whether maintaining tax-free status for certain institutions truly supports a fair and competitive marketplace. Additionally, I suggest continued diligence in evaluating banking mergers and acquisitions, as community banks play a crucial role in our financial system. Their disappearance would weaken the foundation of local economies and limit consumer choice.
When including Credit Unions in the graph, you see just how popular they have become in the past 30 years. The Annual Growth for Credit Unions has eclipsed that of Banks in almost every year since 1995. The following chart shows the respective market share of Banks and Credit Unions in Wisconsin, based on total assets. In 1995, Credit Unions controlled 7% of the market, in 2023, their market share has grown to 31%. NOTE: I am trying to find information regarding mergers and credit unions buying banks, I can only find data pertaining to the previous 3 years, but I am trying to find data that goes back to the 90s, I will include it here.
Central Wisconsin Report - Spring 2025
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